- Gambling Vs Investing Reddit
- Gambling Vs Investing Platforms
- Gambling Vs Investment
- Gambling Vs Investing Websites
Answer: There are those who oppose investment in the stock market, saying that buying stocks is the equivalent of gambling. The argument goes that, since stocks are bought in the hope (not guarantee) that they will increase in value, it is a form of gambling. There are differences, however, between gambling at a casino or buying lottery tickets, and buying stock. Gamblers risk money, which they know they will probably lose, in the hopes of making money quickly. Wise investors buy partial ownership in a company in the hopes of making money over time, which can be a sound way to plan for the future.
The difference really comes down to intent. Some types of investing, such as day-trading, are very much like gambling. Anything that requires 'luck' above wise decision-making and long-term planning should be avoided. Most long-term investments return a profit over time, making them much more like buying bonds or certificates of deposit than rolling dice in a casino. There are many who use investments to secure retirement, education for their children, and inheritance for their families.
Gambling is defined differently than investing. Whether you want to call an investment high risk and you want to say that risk. You know, I don’t like putting money into gold. I think it’s a bad place to put money, but I don’t call it gambling. It’s an ultra-high risk, volatile investment, but it’s not gambling. Day trading is a cousin to both investing and gambling, but it isn’t the same as either. Day trading involves quick reactions to the markets, not a long-term consideration of all the factors that can drive an investment. It works with odds in your favor, or at least that are even, rather than with odds that are against you.
The Bible offers quite a few examples of growing wealth through legitimate means. Some are similar to investing—spending money now to make money later. God’s intentions for how we should manage our wealth are found in many Scriptures. The following are a few examples.Proverbs 28:20 says, “A faithful man will be richly blessed, but one eager to get rich will not go unpunished.” This speaks against the “get-rich-quick” mentality. Looking at investment as a long-term plan for the future is good planning, but trying to make a fortune overnight is not.
Second Corinthians 9:6 says, “Remember this: whoever sows sparingly will reap sparingly, and whoever sows generously will reap generously.” The context is actually speaking about investing in our relationship with God, but it demonstrates how one must often sacrifice now to gain in the future. Similarly, Proverbs 3:9-10 says, “Honor the Lord with your wealth, with the first fruits of all your crops; then your barns will be filled to overflowing, and your vats will brim over with new wine.”
Much of the Bible’s teaching about wealth is a warning against putting trust in wealth rather than in the Lord (e.g., 1 Timothy 6:17-18) or to the detriment of those who depend on us (e.g., Ecclesiastes 5:13-14). As long as we honor our commitments to God and our families with our money, and maintain a spirit of generosity and thankfulness, investing is an option Christians can consider.Podcast: Play in new window Download
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Right before the 2010 Super Bowl, a page 1 article in the February 5, 2010 Wall Street Journal opened with this sentence:
“Investors are sometimes accused of treating the stock market like a casino. Now, one Wall Street firm wants to treat casinos like the stock market.”
Gambling Vs Investing Reddit
The article details the decision of a Wall Street bond-trading company to take over the management of sports betting at a new Las Vegas casino. Lee Amaitis, the company executive who runs the betting operation, says the firm got into sports gambling because “we wanted to turn gamblers into traders.” Using sophisticated financial-markets software, bettors can not only bet on the final outcome, but also make wagers on events during the game, such as whether the next pass might be completed, or who kicks next field goal.
On several occasions, the article noted similarities between investing and gambling. The article even featured a bond trader-turned-professional gambler who said “Wall Street is just a form of legalized gambling.”
Is investing just a form of gambling? For many investors, the answer may be “yes.” But it doesn’t have to be. And it probably shouldn’t be.
In July 2000, Tom Murkco, the CEO of Investor-Guide.com, published an essay titled “What is the difference between gambling and investing?” While Murkco noted that many aspects of gambling and investing might appear similar, there were several distinct and easily defined differences.
For either investing or gambling, the beginning of Murkco’s definition is the same: An activity in which money is put at risk for the purpose of making a profit.
But while the purpose of gambling and investing is identical, the methods by which the purposes are achieved are drastically different.
Here are Murkco’s distinctions:
When someone invests…
- sufficient research has been conducted;
- the odds are favorable;
- the behavior is risk-averse;
- a systematic approach is being taken;
- emotions such as greed and fear play no role;
- the activity is ongoing and done as part of a
- long-term plan;
- the activity is not motivated solely by entertainment or compulsion;
- ownership of something tangible is involved;
- a net positive economic effect results.”
When someone gambles…
- little or no research has been conducted;
- the odds are unfavorable;
- the behavior is risk-seeking;
- an unsystematic approach is being taken;
- emotions such as greed and fear play a role;
- the activity is a discrete event or series of discrete events not done as part of a long-term plan;
- the activity is significantly motivated by entertainment or compulsion;
- ownership of something tangible is not involved;
- no net economic effect results.
When defined this way, it’s easy to see the differences between investing and gambling. It’s also easy to see that because of the methods some people use to invest, their behavior may more closely resemble gambling.
For example, industry studies have repeatedly shown that the behavior of mutual fund investors often accounts for poor investment performance. Because they don’t approach investing systematically, emotions like greed and fear may cause people to make impulsive decisions, with little or no research. Not surprisingly, the results from these methods more often resemble the returns from lottery tickets.
Not Gambling with Your Investments: Easier said than done?
In his book, Snap Judgment: When to Trust Your Instincts, When to Ignore Them, and How to Avoid Making Big Mistakes With Your Money,author David Adler says it’s the psychological component of investing that is the most difficult to manage. Adler contends that behavioral research shows many individuals have an almost over-whelming set of hard-wired dispositions to take gambles rather than make investments. Adler quotes Andrew Lo, an MIT professor of finance:
Gambling Vs Investing Platforms
“The same neural circuitry that responds to cocaine, food, and sex has been shown to be activated by monetary gain as well.”
For some people, the thrill of investing/gambling can be addictive. But when the stakes are one’s financial future or retirement, or your children’s college education, the need for a thrill shouldn’t come by jeopardizing one’s investments.
Gambling Vs Investment
This imperative to not compromise investing by gambling highlights one of the greatest benefits of working with a team of financial professionals: Besides receiving informed advice, a financial professional can often serve as a protection against gambling with your investments, by encouraging you to make sound decisions based on good research that have a high likelihood of success.
Gambling Vs Investing Websites
Take a moment to consider the last few major financial decisions you’ve made in the past year. Then look at the list above. Did you make an investment or take a gamble?